The average waiting time in the UK for payment of invoices under £1m is 71 days, according to UK banking association UK Finance (formerly known as the Asset Based Finance Association).
This is a considerably longer period than the standard 30- or even 60-day terms that most businesses rely on to maintain healthy cash flow.
According to a study carried greece email list out by Sage, one in ten invoices is paid late. This study also shows that, worldwide, the most common excuse for late payments is… none at all.
You heard right. As incredible as it may seem, companies have no justification. They simply don't bother to pay on time.
Any business owner or financial professional knows that this can lead to sensitive and often awkward calls or emails when a payment is overdue. According to the same Sage study, for most businesses the biggest hurdle when it comes to tracking payments is protecting the customer relationship .
Below are five ways to approach the sticky issue of invoice collections that should make those awkward conversations easier to manage—or, possibly, eliminate the possibility of them ever happening.
1. Invoice immediately
If you take your time to issue an invoice , you are sending the implicit message to the client that you do not consider timely payment to be important either.
If you send an invoice late, you will lose a position of strength if you have to contact the client to claim payment.
Additionally, issuing an invoice late can also create confusion for the client, as the time elapsed may result in the invoice being less clear. The person in charge of finance may need to investigate the matter, which means a greater potential for a delay in issuing payment.
When should you send an invoice? How about immediately?
If you use a modern accounting and invoicing solution (e.g. Sage 50) that includes a mobile app, you can even do this in front of the client.
Just finished a job or delivered some stock? Create and send the invoice on the fly using a phone or tablet, and make sure the client knows you did it.
On this basis, any ambiguity about whether you have received the invoice is eliminated in case you need to dispute it.